How to start and raise funding for a truly disruptive business, with Farah Kabir
In 2017, Farah Kabir launched HANX, the sexual wellness brand with women in mind with her childhood friend Sarah. HANX sells a range of products, from their award-winning ultra-thin, vegan, biodegradable condoms to oestrogen-free hormonal contraception. Now stocked online and in Boots, Sainsbury's and other major UK retailers, they are genuinely disrupting the feminine care industry.
⚡Farah is passionate about creating a platform that empowers women to take control of their sexual wellness and pleasure without shame or embarrassment. Before HANX, Farah spent six years working at Goldman Sachs. In this episode, we talk about leaving a secure banking job to launch HANX; the realities of raising money; tips for negotiating with big clients; and the ongoing balancing act of being a founder.
💥 Today on The Wallet:
1️⃣ Communication is key while doing investment raises. When you’re open with your team about it, they remind you why you're doing what you're doing and are also there to support you.
2️⃣ Retail sales is quite similar to investment raising: you can't just turn up when you need funds. You need to nurture that relationship with buyers. You’ve got to build that rapport and keep that going.
3️⃣ For anyone that asks about jumping ship from their job and starting their own business, I always say it needs to be a calculated risk. You need to have a buffer for the rainy day when you might be financially strapped.
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1. What has fundraising been like?
“Go with your gut. It’s got your best interests at heart. That’s something that came from my Mum, and the older I get, the more I feel it.”
We’re always raising money. I thought leaving banking meant that I didn't have to deal with numbers or spreadsheets ever again, but here I am. We have raised just over £1.8 million since we launched. That feels like a lot of money, but it's not when you compare it to other VC-backed startups in the startup space.
Before, I thought fundraising would be relatively straightforward. You pitch a product, show your idea, KPIs and presto, you get the money, right? How wrong I was. I have pitched to hundreds and hundreds of investors all the way from angels to early-stage institutions, and I've had a lot of ‘No’s. It’s not nice getting rejected, but when you are so confident in your product and your brand, there's something about it that gives you that fire in your belly to prove those people wrong. It is character building.
Communication is key while doing investment raises. There are days when, in previous investment rounds, I’ve gotten beaten down and feel awful. But sharing that with the team and being honest has been good. When you’re open with your team about it, they remind you why you're doing what you're doing and are also there to support you.
2. What are some tips for negotiating with huge clients like major retailers?
Retail sales is quite similar to investment raising: you can't just turn up when you need funds. You need to nurture that relationship with buyers. You’ve got to build that rapport and keep that going. With retailers, the best relationships are often the ones where we have kept them in the loop. We update them on the business: what are we doing with our community and brand? What are we seeing from our customers, what do they want? This way the buyers are in the loop and that rapport helps when negotiating.
Retailers drive a hard bargain: they are margin-driven and have their targets. Since we are a challenger brand going up against a couple of big players, we're at the mercy of the retailers a little. But I do think it comes down to your buyer relationship. Is there anything else they can do to support you, whether with online marketing or banners or a reduction in marketing spend in retail? There are other levers you can pull in the absence of that pure margin play that you'd expect.
We knew that when we launched the brand, we needed to have a direct-to-consumer model where we could speak to our consumers and engage with them directly. But we also needed to sit on a shelf since our product is an impulse purchase. People can buy online, but if someone is going on a date tonight, they will go to their local store. So we were having conversations with major retailers even before we officially launched, and it was a long process of keeping them in the loop, communicating with them, and reminding them of who we were.
You always need to keep that relationship going. Buyers come and go but it’s important to have a consistent communication style so that, no matter who the buyers are, they're familiar with it and they know: this is the HANX style. Our negotiating power is always going to be limited compared to a much larger brand, but it's a two-way thing with buyers and brands. You have to think: what can you do to make their lives easier?
3. What’s some advice for those thinking about starting a business?
You read all these stories about people raising millions overnight and making it look easy. It’s really not. I wish people would share the scars and the ups and the downs as well as the ups. I was really lucky. I had a good job. I'd managed to build some savings, and I was younger. I didn't have kids or dependents. At that point, if we failed was, then I would go back to my day job. I had nothing to lose.
For anyone that asks about jumping ship from their job and starting their own business, I always say it needs to be a calculated risk. You need to have a buffer for the rainy day when you might be financially strapped. In the years when we launched HANX, we didn't pay ourselves for a very long time. So take the jump, but make it calculated. Go for whatever business idea you have, but understand the market. Is anyone else doing it? How much is it going to cost you? Can you afford to leave your job to do this?
It was Sarah and me for a very long time. With Sarah, I'm really lucky. She's one of my best friends, and we grew up together, so we know each other inside out. The reason we have worked together so well is that we're very honest with each other. If anyone feels uncomfortable about something, we won't leave it longer than an hour or two to talk about it and hash it out.
Being a founder, you're so full on that you don't get time to really relax. In the last year, I've decided that any downtime I get, I want to invest in myself; if that means a really good holiday or a nice massage or something, I will do that in the hope that in future, I can save a little bit more.
Go with your gut. It's got your best interests at heart. That's something that came from my Mum, and the older I get, the more I feel it. I wish I had followed it more when I was younger. So definitely do that.
RESOURCES:
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Instagram: https://www.instagram.com/hanxofficial/
Getting down to business: Hanx founders on sexual wellness and pioneering women's pleasure
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